FBT exemption grows regional EV uptake
Fringe benefits tax exemption on electric vehicles has bolstered their uptake across regional areas in Australia, data has revealed.
New research from the National Automotive Leasing and Salary Packaging Association (NALSPA) has showed electric vehicle (EV) uptake has increased in outer suburban areas based on fringe benefits tax (FBT) exemption.
The association said FBT exemption had enabled Australians to afford electric vehicles they would not have bought otherwise.
NALSPA chief executive Rohan Martin said the lazy stereotype of EV drivers as wealthy inner-city people had been smashed as more motorists purchase EVs due to the exemption.
“From Werribee to Wanneroo, ordinary Australians living in the outer suburbs are actually the people most likely to take advantage of and benefit from the discount to battery EVs and Plug-in hybrids provided through the FBT exemption and novated leasing,” Martin said.
“We’re also seeing a strong pick up among workers living in regional centres including Ballarat and Toowoomba.”
According to NALSPA, employees could typically save about $5,000 more annually through FBT exemption and novated leasing.
The FBT policy was a crucial step in encouraging Australians to purchase EVs and actively drive the efforts towards net zero.
However, the tax exemption is set to end on 1 April 2025, meaning employees would need to act quickly if wanting to take advantage of the EV tax savings, NALSPA noted.
“Owning and operating a car is one of the biggest household expenses for most families but removing the FBT on BEVs and PHEVs makes them more affordable and accessible,” Martin said.
“Given that there are barriers to motorists considering EVs, without the FBT exemption in particular we would be reducing the opportunity for many ordinary working Australians to own a cleaner and more efficient vehicle that meets their transport and lifestyle needs.”
Outer city suburbs across Australia had also seen an increase in plug-in electric vehicles (PHEVs) as data revealed sales had increased 128 per cent over the past year.
NALSPA research estimated that novated leases had made up over half of PHEV passenger and PHEV SUV sales in the Australian market per month, since July 2024.
Martin said workers in outer suburbs were benefiting from the savings of owning an EV.
“They’re not only saving through the FBT exemption but also cutting long-term running costs including through rooftop solar for charging, as research shows that many of the top postcodes with high uptake of the FBT exemption also have high solar panel density.”
“An expanding range of PHEVs particularly appeal to those who frequently drive long distances but may experience range anxiety with a fully electric vehicle as they offer the ability to drive with much lower tailpipe emissions during daily commutes while also saving on fuel costs.”
NALSPA said FBT exemption was important in helping save everyday Australians money and contributing to saving the environment.
“On top of this, the National Vehicle Efficiency Standard coming into effect next year is set to bring in even more efficient petrol and diesel cars for Australians to choose from, helping to reduce air pollution in our communities and make further progress toward Australia’s net-zero goal.”
About the author
